TIE #007: The Secret to Turning $1,000 into $100,000
The power of compounding is misunderstood and is a must-know.
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If you want to stack $100,000 or make over $10,000/month, you must embrace the concept of compounding.
Compounding is the process in which an asset’s (the business in this case) earnings are reinvested to generate additional earnings over time.
The less capital you or your business has to work with, the more important compounding is.
Let me demonstrate how powerful this idea is with some math:
Scenario 1: Spend $1,000 on a bunch of product and you finally sell all of it 6 months later for a return on investment of 100%
Scenario 2: Spend $1,000 on a bunch of faster selling product that sells out within 1 month, but it only yields a return on investment of 30%. Then, repeat that process 5 times over the same 6 month period.
Scenario 1 profit after 6 months: $1,000
Scenario 2 profit after 6 months: $3,800 (!)
Even though Scenario 2 had product that returned much less ROI, the profit was magnitudes larger due to how often the profit was reinvested.
Time is king.
The time in which you can deploy capital, sell product for a profit, and then repeat the process is much more important than how much profit an individual product makes.
Take hamch0i for example, who is a member of my private mentorship group:
They had $20,000 in sales over a 7 day period this month and likely made $4,000-$8,000 in profit during that period.
Despite only being a member of my group for 16 months, they’ve built a mini-empire.
It wasn’t because they threw $1,000 into the stock market or some product that takes 4 months to sell.
It was because they churned product on Amazon with the idea of compounding at the forefront.
hamch0i now has the luxury of making well over $10,000/month in profit year round being their own boss or continuing to reinvest for more future growth.
This is called “freedom”.
When operating an online business, your #1 goal should be to spend money with the intention on that making money back + more as soon as possible.
The faster you do it, the more efficient your growth will be.
As your capital grows, only then should you deploy capital in areas with a longer time frame but a larger return on investment.
I don’t know everything, but embracing the idea of compounding earned myself financial freedom and has several people I work with well on their way to doing the same.
When you are ready, there are two different ways I can help you:
If you are interested in starting an efficient one-person online business, I recommend starting with one of the following:
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